GRI Application Levels: Why Strive for an A?

BrownFlynn is pleased to announce the release of its newest whitepaper entitled: “GRI Application Levels: Why Strive for an A?”

BrownFlynn partnered with CSRHUB to assess the relationship between a company’s Global Reporting Initiative (GRI) Application Level and score on sustainability ratings and rankings. CSRHUB aggregates and normalizes Corporate Social Responsibility (CSR) ratings information from more than 140 sources on nearly 5,000 companies across the globe.

The study demonstrates why companies with a higher Application Level are better able to manage their sustainability impacts, and provides evidence of a correlation between a company’s GRI Application Level and its reputation for sustainability performance. The study also clarifies the confusion around differences between Application Levels.

In short, the study finds that companies reporting at level A or B receive higher sustainability ratings than other GRI reporters—especially on governance ratings.

In addition to providing the data to show that companies reporting at an Application Level B or higher score better on other sustainability rankings (shown above), this study gives bite-sized summaries of the key differences between the Application Levels, synthesized into manageable chunks.

Because GRI does not have a minimum quality requirement for profile disclosures from a company, it can be construed that GRI places less importance on report quality and only values transparency. This is not the case. GRI subtly influences report quality through the specificity of the required disclosures and more overtly manages report quality by requiring disclosures about the report itself. These are called ‘Profile Disclosures’, and they provide information about a company’s overall structure, internal controls and info about the report itself. The Profile Disclosures that ask questions about the report itself serve as a quality standard assessment. Further, to increase transparency, GRI requires companies to declare an Application Level. To increase quality, GRI requires companies to disclose its processes for determining materiality and for engaging with stakeholders.

Overall, companies with an Application Level A or B are able to demonstrate more comprehensive sustainability management strategies, as well as receive higher sustainability ratings than other GRI reporters. So, should you strive for an A? That will always depend upon where your company is in its sustainability journey. But what we will say is that the internal discussions prompted during pursuit of an Application Level A or B will likely improve governance, attention to key impacts, sustainability policies, procedures, training strategy, goals, internal controls and ultimately sustainability performance.